Walgreens: Shoplifting Causes Closing Of 5 Stores In San Francisco, But Many Doubt That Explanation

• Walgreens stated it is closing some San Francisco stores due to a rise in retail theft.
• Police data obtained by the Chronicle didn’t show excessive rates of shoplifting reports on the closing stores.
• One expert stated folks moving out of the city during the pandemic might’ve hurt Walgreens’ business.

Walgreens announced Tuesday it will be closing 5 of its San Francisco locations as a result of “organized retail crime,” however police department data, local officials, and policy experts are casting doubt on that reasoning, according to a report published by the San Francisco Chronicle on Saturday.

While the report stated the chain has experienced retail theft, other factors like the COVID-19 pandemic and oversaturation of stores had been cited as potential factors behind the decision to close the stores.

Walgreens spokesperson Phil Caruso stated retail theft across its San Francisco locations has increased in the past few months to 5 times the chain’s average, SFGate reported.

However, San Francisco Police Department data obtained by the Chronicle contradicts Walgreens’ claims, with one of the stores slated to close reporting only 23 shoplifting incidents since 2018. Some incidents of shoplifting probably go unreported, however the closing stores had on average less than two shoplifting reports monthly since 2018.

“Organized retail crime continues to be a problem facing retailers throughout San Francisco, and we’re not resistant to that,” Caruso informed SFGate. “During this time to help fight this issue, we increased our investments in security measures in stores across the city to 46 times our chain average in an effort to offer a safe environment.”

San Francisco Mayor London Breed pushed back against Walgreens’ said reasoning for closing the stores.

“They’re saying (shoplifting is) the primary reason, however I also think when a place isn’t producing revenue, and once they’re saturated — SF has quite a lot of Walgreens locations all around the city — so I do think that there are other factors that come into play,” she told reporters last week.

Dean Preston, supervisor of San Francisco’s 5th district, which will be impacted by a store closure, stated the pharmacy chain is “abandoning the community” and has “long planned to close stores,” the San Francisco Chronicle reported.

“Odd that some are so offended that I’d suggest {that a} massive corporate chain could be closing retail locations for the precise reason they advised investors they’d close locations, rather than the reasons said in their external PR,” Preston stated in a tweet on Friday.

In a 2019 Security and Exchange Commission filing, Walgreens announced it will launch a “Transformational Cost Management Program” that will shutter 200 stores in the US to be able to save $1.5 billion in annual expenses by 2022.

A May study published by Stanford economist Nicholas Bloom found 15% of residents left San Francisco during the pandemic and haven’t returned, which he informed the Chronicle might explain Walgreens’ waning customer base in the city.

San Francisco does have relatively high rates of property crime, which criminal justice researcher Magnus Lofstrom informed the Chronicle might be due partially to the Bay Area’s vast income equality.

Walgreens didn’t immediately reply to Insider’s request for comment.